Chainalysis Denies Allegations Of Collecting And Selling User Data From Exchanges Like Coinbase
Chainalysis Denies Allegations Of Collecting And Selling User Data From Exchanges
Blockchain technology has allowed the crypto industry to remain trustless and transparent, making transaction data into public knowledge. The immutability has ensured that any transaction on the ledger remains there, including details about the amounts, the addresses, and the timing of the transaction. However, information that would apply to the “real world” is not included, as Chainalysis confirmed.
Chainalysis recently created a blog post to respond to the allegations that they retain user data and sell it to third-party companies. This platform is considered to be one of the highest profile firms that the blockchain industry has seen, offering necessary tools to help governments, law enforcement agencies, and other firms to check their transactions for illicit activity. Often, these tools allow various entities to examine transactions for money laundering or terrorist financing, but they are not limited to those cybercrimes.
After Coinbase received immense criticism over their acquisition of Neutrino, which was run by many former employees of Hacking Team, allegations arose that related companies may be selling their users’ data. When discussing the purpose of the acquisition, an executive from Coinbase stated that the former providers they were using for intelligence tools were selling off their customers’ user data.
There was no intelligence firm directly named by the executive, but Chainalysis decided to speak up anyway, clarifying that there is no requirement involving user data on the platform, and there is no storage either. Furthermore, without the ability to store the customer data, they do not circulate it either.
In their clarification, the company explains that its services specifically flag transactions with markers for “risky” or otherwise suspicious behavior. Often, these transactions come from illicit entities, like the Dark Web or terrorist organizations, though there are other details in their algorithm to determine a threat. The only information needed for a wallet is basic knowledge that there is a customer assigned to it, and there’s nothing during that registration process that would include identifiable information. Furthermore, the analytics tools available from Chainalysis specifically examine transactions, rather than the wallets.